Ok so I am a 4th year med student who just matched and will be getting married during the last month of med school.


I should make 38,500 while my future wife makes 35,000 bringing gross income to 73,500. Problem is since we both just started (soon to start in my case) our jobs we have basically no money for down payment and do not have a long track record of stable income. In addition our total student debt is around 50,000 and I plan on only paying the interest payments on my portion of 34,000 (I believe that's called foreclosure).

Can I really find a lender to offer us a loan for 150,000 with no down payment, no PMI, closing costs rolled into the loan or paid by seller AND still have a nice interest rate of around 6%???

Has anyone actually been able to pull something like this off? The more I read the more I think it's not gonna happen.

I realize I need to ask these questions to a lender, but I thought those of you that have been down a similar road might offer some advice. Thanks!

Actually, I think foreclosure is something you will be trying to avoid over the next few years of residency. Perhaps you mean forebearance? :D

You should be able to find a lender to finance 103% of your mortgage cost. Essentially the entire home cost plus the closing. You can probably find this without PMI as well. You may end up paying a little higher interest rate in return however, probably a point and a half or so higher.

Depending upon your circumstances such as length of residency and how long you intend to stay in the home, you might be interested in doing a 5 year ARM (adjustable rate mortgage). Here you have a lower locked-in rate for the first five years of the mortgage and then at the end of those five years, the rate converts to whatever the current rate for that time is. At this point you can either refinance at the new rate or stay with an adjustable rate which may either go up or down year to year.

It is a good deal for all involved, especially if you are planning on selling the home before the five years are up. Since interest rates are low right now, a lender is willing to enter into such an agreement with the hope that interest rates will be higher in five years than they are now. That is a pretty good bet. In return you get five years of an interest rate that is usually a little less than what you could get with a 30 year conventional, especially if you are financing 103% with no PMI. As a resident, you are a good bet for no PMI since you usually motivated, stable and essentially have a guaranteed job for the life of your residency hand have excellent earning potential once residency is finished.

Be sure when you find a mortgage broker to read the fine print. Specifically, don't get caught signing a note with an "early repayment penalty." Bad deal for you, great deal for the lender.

Hee hee...forebearence NOT foreclosure....typed the wrong word!

Anyway, yeah I'm doing a lot of research right now but it is reassuring to hear that you can get 103% with no PMI. I will definitely look into ARMs vs maybe a hybrid loan since I will be doing a 5 year residency. Of course a no prepayment penalty is a must.. I hope some lender will honor all of my requests without screwing me with a high interest rate....

Does anyone know if certain lenders offer resident/doctor specific loan programs. I have heard of physicianloans.com but am uncertain if there are others and if they offer any real advantages...

Thanks EdinOH!

Crusher:

If I were you, I'd talk with some of the residents at the program you matched to...they'll probably have more specific info regarding different realtors/lenders in that area. The residency coordinator/secretary may have some good info as well since she sees new residents going through the same process every year.

Some of the residencies that I interviewed at actually had pamphlets from realtors that talked about the doctor's loans that were available with no money down, closing costs incorporated into loan, etc.

Another good tip Scott. Thanks!

check out this old thread (http://forums.studentdoctor.net/showthread.php?s=&threadid=31004&highlight=mortgage+thread)

1) You will have no problem getting a loan. Many banks happily lend to residents.

2) [Soapbox alert] Seriously consider the financial realities of home ownership. The financial advantages over renting are quite minimal for 5 years. For example, say you buy a house for $100K and have a realtor sell it for $100K 5 years later. How much do you net?


$1,000.
Yep ... peanuts.

Granted, houses usually appreciate, but not always.

I could go on, but I'll end the soapbox.

Originally posted by Pilot Doc
1) You will have no problem getting a loan. Many banks happily lend to residents.

2) [Soapbox alert] Seriously consider the financial realities of home ownership. The financial advantages over renting are quite minimal for 5 years. For example, say you buy a house for $100K and have a realtor sell it for $100K 5 years later. How much do you net?


$1,000.
Yep ... peanuts.

Granted, houses usually appreciate, but not always.

I could go on, but I'll end the soapbox.

To look at it another way...

A 100K home financed at 6% over 30 years will cost you $600/month in home payment. (not counting taxes and insurance).

Paying rent for 5 years at $600/month equals $36,000. Money you will never see again.

Purchase a home at $100K and sell it for what you bought it for after 5 years, you lose $6,000 assuming 6% real estate commission.

But, of the $7200/year you pay in house payment, approximately $6700 of that is mortgage interest. All of which is deductable on an itemized tax return.

Odds are high you will make some money on your home, or at least enough money to pay your sales costs in five years. You essentially live rent-free for five years and get the tax benefits.

Pretty simple issue in my opinion.

Purchase a home at $100K and sell it for what you bought it for after 5 years, you lose $6,000 assuming 6% real estate commission

Don't quite follow you here. You lose whatever money is not being paid toward the principal. Of course the interest can be deducted on your tax return, but this is not a $1 for $1 exchange. A 1 for 1 exchange is a tax credut, which is very different from a deduction. Also there is a limit for itemizing your deductions.

In buying a house you also need to consider the possibility that you may get hit up for a major repair. Replacing something like an AC unit can be a bill of thousands.

Originally posted by blotto geltaco
Don't quite follow you here. You lose whatever money is not being paid toward the principal. Of course the interest can be deducted on your tax return, but this is not a $1 for $1 exchange. A 1 for 1 exchange is a tax credut, which is very different from a deduction. Also there is a limit for itemizing your deductions.

Consider it this way: the money you pay toward rent is a 100% after-tax expense. As for your mortgage payment, the portion that goes toward interest is basically before-tax money, because it's deductible, and the portion that goes toward the principal is like a tax-free investment. It goes into the equity of your house, and if the value appreciates, you will make a profit on which (I believe) you won't be taxed.

I think the only way it is financially worse to own a house is in the very short term, if the house doesn't appreciate much. Then you won't have much equity and you will lose all that money you put into closing costs and broker commissions. It is an investment, and a good one these days, especially if you're in med school or residency where you're locked into a location for 3-6 years.

Owning a home does have its non-financial downsides as you mentioned, like when things break it is your responsibility. Sometimes I do miss the old apartment, where I didn't have to give a minute of thought to the plumbing, the heating, the outside of the building, mowing, shoveling, etc. But you can always buy a condo or townhome if you don't want to worry about all that (although you'll still pay the cost through maintenance/association fees).

Purchase a home at 100K I wish!!, where I live there's not much under 200K.

I really doubt that you will find a 100+% loan with no PMI. A 103% loan will cost you several interest rate points. An ARM is a good idea, however most have a baloon due at 5 years if it is a 100+% loan. Remember that when you take out an ARM you are gambling on the feds/economy to keep rates low. It really takes 8-10 years for buying a home to make financial sense. I have heard that Bank of America has a Physicians First Home Loan programs that will do 100+% loans at decent rates. Good luck to you. Crypt

Cyrpt,

Not to burst your bubble, but my wife and i purchased a home in Aug '01 with 3% down. We are now placing it on the market and will easily clear 22-26k after commsions, fees, etc....


The fact of that matter is we really dont even have to sell it, we could easily rent it out and break even every month. But the wifey really wants a big, fancy, luxury place which is precluding us from hanging on to this house. But she deserves it, she has put up with for 7yrs.

Point:Realestate is always a good investment

Just know and understand your exit strategy

You need to understand the real estate market for your area to see if home ownership makes financial sense. For example, we bought our house at the beginning of second year of med school taking a risk of having to sell it in 3 years if I move for residency because the market is VERY seller friendly now. A market analysis shows that the house is now worth $40 - $60K more than we paid for it. (Kinda makes me want to match somewhere else!) But, we did have some of the home-owner problems, like we had to replace the entire electrical system in the house (to the tune of $4000) and we had to replace the sidewalks of our corner lot for another few grand. It's all what risk you're willing to take and if the local market can justify it.

I will be graduating from med school with something to the tune of 150-200K in load debt from med school and undergrad. It could be less if my fiancee is able to help, but she is just strating out as a nurse and may not be able to for a while.
When I am in residency and she's working, we will have a pretty good combined income ~70-75K gross. Now, how much is this size of a loan debt gonna hurt us in getting a modest home? We are likely to build some down payment $...don't think it could be more than 5-7K though.

If you can prove that you have deferred the loans for residency (which you can almost always do for Med school loans) and if you can defer your undergrad loans or if they're not too much, and if you have a stellar credit rating, you will have no problem getting a mortgage.

Casey

bla_3x,


Your situation is not entirely unique. You will have to make a few financial and personal choices as to whether you value your lifestyle and comfort so much as to pay a "premium" for that. Meaning you can easily defer/forebare your loans so that you have sufficient cash flow during residency for a mortgage, that of course comes at a cost as interest will continue to accrue on your loans. But if you dont mind paying this premium then by all means go for it, I am!

What the banks will be looking at are a variety of factors but some of the most crucial are these

Gross monthly Income

Debt to Income ratio-calculated by taking your fixed monthly cost(debt) and dividing by youy gross monthly income...in general it should be no more than 36%(i.e credit card monthly payments, car payment, loan payment, etc....)

FICO score(if getting it jointly most lenders will either avergae the two or weight the average toward the person with the lowest score....FYI FICO of 720 or higher gets the best rates in general


checkout bankrate.com for general info

Currently I am investigating the Bank of America NO down, NO PMI Doctor program, I believe physcianloan.com through towermortgage offers something similar as well.

I caution you though, when dealing with realestate transactions do your due diligence, be very cautious and skeptical, trust ABSOLUTELY NO ONE.....these things involve alot of money and you are paying for ALL of it, so no one cares if an extraa 2K gets dumped into the heap of docs that are signed at closing. Everyone wants your money it is up to you to not be a onlooker in this process.

Originally posted by thegasman
Purchase a home at 100K I wish!!, where I live there's not much under 200K.
200K? Peanuts! Try looking on the west side of LA. Nothing livable for a family available for less than 500K.

Does anyone know if it's possible to get a loan for homes in California?? We're looking at residency in San Diego and homes are b/w 300-400K. I'm going to defer my debt, but won't have much for a down payment. My wife and my income combined will be about 80k. Is it possible to qualify for a loan b/w 300-400K??

The rule of thumb for calculating home much house you can afford is 3X your annual income. For you, this would be about $240,000. This would be modified by your other debt somewhat. Of course, this was before we had obscenely low interest rates. Even so, I would be surprised (but very happy for you) if you could qualify for a loan of 400K, but you might pull the low 300K

Look at the payments and figure if you can afford it. Another rule of thumb is that you shouldn't spend more than 30% (I think) of your net income on your mortgage.

If you buy a 400K house with an 80K down payment, at 5% your payent is $1717.

Ed

If you Google the question "how much house can I afford" you'll get hits from a number of financial web sites that can estimate your loan qualifications reasonably accurately.

For those looking into mortgage rates here is some info that i recently received via a phone call with a Bank of America representative. This info is specific to their doctors loan program no PMI, no down

For jumbo loans which are those greater than 322K
5/1 ARM 4.74%
3/1 ARM 4.00%

I think in general ARM's are the best option, as you basically can get more house for our limited dollars

Rates fluctuate daily, but if Greenspan holds rates at 1% we shouldnt see too much fluctuation for several more months.

Go to physicianlender.com and you can get all the info on different types of mortages etc. They have special programs for new interns where there is no down payment and they cover the closing costs as well. Bank of America used to also have programs for interns. Local banks will also sit down with you and try to work something out. They know your good for the money with that MD behind your name and they always love the business.

My wife and I just went through the mortgage loan preapproval. The bank we dealt with has medical private banking, where all they deal with is physicians.
We got a 100% loan plus closing costs.
5.5% interest on a 5/1 ARM
No PMI
Zero down

There are several banks who offer this service to residents because they know we are cash poor and that we have large income potential.

There are some areas of the country that may laugh at you when you ask for private banking as a resident. I am in a small town with few residents and the local banks shrugged at me when I asked for private banking making 37K a year.

I still qualified for a reasonable mortgage with PMI :mad: .

Of course these same banks can kiss my arse when I'm done and shopping around for a much bigger loan. Good Luck!

Depending on where you live the taxes can be a factor as well. In some desirable places the taxes could exceed 4-5K/yr. This can be over $3-400/month, on top of your regular monthly mortgage payments. Also if that roof decides to leak and you need to repair/replace it to the tune of $10K you are SOL. Make sure you do your due diligence and have a cash reserve for potential financially draining repairs.

Has anyone heard of "interest only" loans. Supposedly, they give you a lower monthly payment at the beginning (you're only paying the interest, no principal) and then scale up each year. They're designed for the new professional whose income will change rather quickly. Anyone have any experience with these?

Originally posted by FourthTime
Has anyone heard of "interest only" loans. Supposedly, they give you a lower monthly payment at the beginning (you're only paying the interest, no principal) and then scale up each year. They're designed for the new professional whose income will change rather quickly. Anyone have any experience with these?

This is just a new name for the old balloon payment loans. It's fine as long as you know what you're getting into. You will build no equity so when you sell you may have to have a pile of cash to pay your real estate fees or any losses you may have incurred.

Ed

Originally posted by camkiss
My wife and I just went through the mortgage loan preapproval. The bank we dealt with has medical private banking, where all they deal with is physicians.
We got a 100% loan plus closing costs.
5.5% interest on a 5/1 ARM
No PMI
Zero down

There are several banks who offer this service to residents because they know we are cash poor and that we have large income potential.

wow, very nice :) did you use a large national bank or a local one?

i'll be moving to the DC area and we're currently going through the pre-approval process. some people here have told me that bank of america offers some nice physician mortgage programs, and i'm gonna give them a call as well.

this is quite a bit more stressful and complicated than i anticipated, and the expense of the properties in DC doesn't help matters any.

edmadison,

I think you should clarify your statement. You are correct that no equity is gained, but that is due to to not paying down your principal. However, you can certainly gain equity through appreciation.

Interest only loans can be a good choice, especially if you are living in areas where housing prices are extremely high i.e. Downtown Chicago, Miami, San Fran, Manhattan, etc... and your income is most likey exponetially increase in a few years i.e residents

FYI-you dont really pay that much in principal the first few years anyways....I believe I have paid roughly 3,800 in principal or so on a 158,000 loan over the past 3yrs since i started school. The house is now worth 192k, If i had done a interest only loan I could have been driving a BEEMER or taken a few more trips with the extra money

Yes, thank you for clarification.

I think getting an interest only loan is much like leasing a car. At the end you don't end up anything. However, it's a good deal if your cashflow is poor and you know it will go up. In my prior life I leased a vehicle knowing that I was going to purchase it at the end of the lease. I did this because I knew my income was going to double after a year and I would easily be able to afford the buyout.

I will continue to warn everybody, though. Appreciation in real estate is not guarenteed. Especially if you intend on owning for a short period of time. I will likely only sell my house for what it cost me. My poor parents moved to Connecticut in 1988 at the height of the real estate market, the bottom dropped out in 1989. Their house is still not worth close to what they paid for it.

Ed

edMadison,

Good points and reminders about the potential perils of realestate.

I beg to differ on your lease comparison. For one, there is no chance in hell that a car will ever appreciate(sans exotics), realestate has the "POTENTIAL" and historically has increased over time(location, location, location). Secondly, the interest you pay in a lease is not tax deductible, the interest you pay on a home loan is(granted if you are in low tax bracket this may not be of huge benefit, but some people have spousees/partners with incomes that place them in higher tax brackets). And lastly, the exit stategy on a car lease is either buy or return the vehicle. On a home it is endless, it can continue to be your primary residence, you can sell, you can rent/lease, you can refinace or take a line of credit on the house and rent it out(assuming appreciation), etc..

Of course another advantage is that even if you lose a few thousand or only break even, you now have a credit history with homeownership. This will give added flexibilty/leverage in acquring your dream home, investment property, etc....


Just my .02$

question:

if you have enough liquid assets to pay 50% or 100% of home up front, is it better to do so, or would u always try to make the smallest or no downpayment at all?

chef,

It really depends.

You will hear valid arguments from both sides.
At present with interest rates extremely low, your money might be better served in another vehicle with greater return on investment(ROI). Of course if you do not know of said vehicle then you might be better served with making the larger downpayment.

Dont forget as long as you dont have a mortgage with a prepayment penalty, there is nothing preventing you from paying off the mortgage.

A houses gains are only paper untilyou tap them via equity line, selling, etc... Having 50k in the bank is liquid, you can grab those funds with no expense or waiting.

I would talk to a few trusted CPA's, and your financial planner and see what their thoughts are on the matter. Just make sure they know your situation, and your potential financial future.

Of course make sure you fully fund your Roth IRA, as you most likey will not qualify for that after residency.

just my .02

I spoke with a Bank of America rep yesterday about getting pre-approved for a mortgage. She was VERY knowledgable and said there are only 17 states that recognize the "physician loans" and lucky for us, Oregon is one of them! (where we are moving for residency) The physician loan is 100% of the loan, reasonable rate, mort. insurance waived, and they do not recognize your student loan debt, even before you consolidate your loans, as debt. So this means we can be pre-approved for a loan and buy a house before my husband graduates in May and move directly into our new home when we relocate! :clap:

We are in Kansas City, if anyone is interested in her name/number- she was extremely nice and helpful AND her brother is faculity at UHS! ahempel@mail.com

Amy

Interesting. I'm thinking California wasn't one of the 17. Do you know what the 17 offering the loan were?

Honestly, I didn't ask. I was just relieved to find out that Oregon was one of them. perhaps you could check out the Bank of America website, call one of their reps, or just "Google" your question and see what comes up. Good luck!

Hey InGas....

Is the Bank of America 5/1 ARM a 5 year ARM that switches to a fixed rate thereafter or vice versa? Do you know what index they are tied to and what the prime is? I need to call them myself but I hate having to go through the 10 minute computer generated bs.

Crusher,

I am not sure what index it is tied to, but I do now that a majority are tied to the LIBOR index. I do not believe those were quotes for a convertible option, as those usually have a higher rate.

Sorry i could not be of more help, but please when/if you find out please post.


FYI-I talked with a broker form physicianlender.com, and was told that depending on the property I could possibly qualify for a 500k loan!!! This is on about 115k salary(wifey+mine), 125k in student loans..I would never do something like that, but apparently they will give it you...

I used Bank of America physician loan to buy a house worth $160k last year. My take home was about 44k at the time, my wife doesn't work.

Compass bank also has a physicians loan.

My deal was a 5/1 ARM, 4% rate, 100% financed, with no PMI. Hard do beat that deal. Closing costs were about 3%.

Generally, the best home lenders are Credit Unions, if you have one associated with your university.

Please forgive my ignorance, but I'm new to all of this. What exactly does 5/1 ARM mean?

ARM = Adjustable rate mortgage

5/1 = 5 years fixed, then adjustable.

Update on the Bank of America Loan program:

1. 720 FICO score required.
2. Yes, Jumbo Loans are ok
3. Condos, New Construction, Townhomes all qualify
4. Loans have to be either:30yr, 15yr or the most popular 5/1 ARM


Discussion:
Personally, the 720 FICO is steep, especially for a person who has never had a job before or any major credit obligations. The rep did say that if your spouse makes more, and has a higher score than the 2 scores will be averaged and weighted to the higher income(this is a big plus for me). I was quoted a rate of 4.75 on a 5/1 ARM which is about 0.5% higher than their regualr posted rates.

I was quoted, as an example the closing costs(which YOU do have to pay) on a 200k loan of $2,800. All in all not a bad loan.

On physicainlender.com, the closing cost were quoted as up to 3% of the loan........ouch!

why would one go for 5/1 ARM right now when most likely rates will go UP next 10 yrs? rates cant possibly go down lower.. unless u were only planning to keep that house for less than 5 yrs

InGas:

I think you made a misleading comment when you said YOU have to pay closing costs. While you can not add them to the loan (i.e. LTV ratio is max 100%), you can have the seller pay. Just don't want anyone to be detered for that reason.

Also, I was told the FICO score has to be the physician's score. If your wife is a doc then yes you can average, but if she is not then I was told you can not avg. I dunno though b/c I did not pursue this as my FICO is > 720 and my wife's is not. The nice thing for me is that they will use only my FICO score but will add in her salary without looking at her score...sweet deal..

I was quoted similar rates. The big thing to know is that the lifetime and one time adjustment cap is 5 percent. Thus if we get the loan now at about 5 percent, the worst case scenario is at the end of 5 years it adjusts to 10 percent.

As I only plan on living in my house 5-6 years, a one year risk of 10 percent is livable for me.

Also, the 30 year fixed is not an option. Only 15 year. Also there is a 7 year ARM available (7/1) for which the rate is slightly higher but may be worth it to you if your residency is 5 or more years.

Bank fees are 781.

That's all I know for now......

Crusher,

Thanks for clarifying the closing cost point.

As I look back at my notes you are correct about the 7/1 ARM option, and not the 30yr fixed.

About the FICO score, I was curious as my score is just under 700 and my wife who is a doc has a 780 and will make more money, i was told that her score would be considered if she was the higher income earner.

Thanks for informing me about the 5%cap, did not have that info. Was not really concerned as I am confident that I will be selling in 5yrs.

InGasWeTrust,

Yes this is how our situations differ. Your wife is a doc, so actually she could be the primary borrower (probably already is) and her score would be used. However, since you are also a doc they might have to average your score in. In my case, since my wife is not a doc, they can ignore her score.... Regardless, it should work out for the both of us!

Approximately how much would monthly mortgage come out to be if I wanted to buy a 150,000 home? Would it be doable with a car payment of about 700/month off of a 37k salary?

A mortgage payment on a borrowed $150,000 at the current average for 30-year mortgages (5.38%) would be $840 per month. On top of that you would add taxes and homeowners insurance, plus Private Mortgage Insurance (about another $90 per month) if you don't put down 20% (or you can pay a higher rate).

I think it would be possible but difficult to do on a 37k salary with a $700 car payment. Perhaps a used car would be a better option.

Originally posted by tcw2u
Approximately how much would monthly mortgage come out to be if I wanted to buy a 150,000 home? Would it be doable with a car payment of about 700/month off of a 37k salary?


car payment of $700/mo??? wowow what r u driving a bmw M3 or something.. must be a $50k car

Since your salary will be going up significantly after residency have you considered an interest only loan. Basically, you would only pay the interrest for x amount of years, then you would either refi with a traditional loan (usually best bet) or start making principal and interest payments. Usually the interest only is about 5 years. Not great for the long term as you aren't paying your principal down (you can choose to send in principal money each month) but makes it a little easier to manage.

I don't care how much I come ahead in the end I love having my own house. I can do what I want to it and not have to answer to anyone. If I want my daughters room pink (we just painted it) or my kitchen blue (painted that too) I only have to wait until my husband goes out of town for his job :laugh: And I can put up as many pics as I want on the walls. There is just something about it being yours. We are lucky to live in Phoenix, AZ (except when it is 115 in the summer) where you can get a nice house(2000 + sq ft) for 150,000 and a brand new one for the same price on the outskirts

Ayndim,

That is the way my wife and have deceided to go with a interest only loan.

Instead of getting some mediocore house for 275k which is what we would qualify for on a 30yr traditional. We are now looking up to 400k for a decent place.

Our reasoning for doing this is several, hopefully we will have the income to be able to refi in 4-5 yrs. Second, the tax benefit will basically allow us to spend ALL of our money and avoid taxes as much as possible. third, in theory/historically the house should be worth more than we paid for it it in 4-5yrs, thus creating some favorable refi options for us.

I will add that we are previous homeowners, and will have about 30k cash going into the house for decorations, emergencies, etc..

FYI-
I was last quoted on a interest only loan for 5 yrs, 0 down, no PMI
300k-1400
400k-1850

Plus taxes, Homeowners insurance

Figure property taxes at 1.75% of purchase price.


And remember that all the payment and property tax is tax deductible!

Originally posted by chef
car payment of $700/mo??? wowow what r u driving a bmw M3 or something.. must be a $50k car
Can you even get an M3 for 50K? My brother had a convertible M3 which came to a little over 70K. 700/mo seems a lot to pay for a car loan during residency, though.

Originally posted by InGasWeTrust
Instead of getting some mediocore house for 275k which is what we would qualify for on a 30yr traditional. We are now looking up to 400k for a decent place.
...I'm awfully curious where you live that a "mediocre" house costs $275,000, and a "decent" one $400,000. My fiancée and I will be able to pick from some absolutely palatial residences & properties for little more than that.

Originally posted by aphistis
...I'm awfully curious where you live that a "mediocre" house costs $275,000, and a "decent" one $400,000. My fiancée and I will be able to pick from some absolutely palatial residences & properties for little more than that.

the DC area for one. i'm looking for housing there, and the single family housing that you can get for 225-275k is definitely a step below "mediocre", especially considering that 250k in the midwest will buy you a damn fine house.

go to realtor.com or lendingtree.com and check out the housing searches there. you'll be surprised how little you can buy for what seems like a boatload of $$$.

the upside is that you are almost guaranteed your home will appreciate.

You can get a stripped down version of the non-convertible M3 coupe at about 46k MSRP. Any options you add to the car is going to cost more. For this car the usual goodies like leather and traction control and hid headlights will probably put it in the 50k range. Actually my car payment is around 600 per month but adding insurance it comes out to 700/month, and no it's not a BMW. I think it's not bad at all during residency if you are single and have no other liabilities like feeding the kids or wife. I was glad to hear that you can get a 150,000 house for a monthly mortgage of around 800/month. That leaves about 800-900/month for paying bills and having fun. I live in the SE and not in DC so that goes a long way.

Originally posted by Sessamoid
Can you even get an M3 for 50K? My brother had a convertible M3 which came to a little over 70K. 700/mo seems a lot to pay for a car loan during residency, though.

Did your brother get the M3 when it first came out? There was a huge markup for the first 1-2 years after it came out. The markup was even worse in California. MSRP just went up to $47,795 for the M3 coupe and $56,295 for the convertible.

Originally posted by Stinky Tofu
Did your brother get the M3 when it first came out? There was a huge markup for the first 1-2 years after it came out. The markup was even worse in California. MSRP just went up to $47,795 for the M3 coupe and $56,295 for the convertible.
California, where everything is obscenely expensive, and the state is still broke.

Originally posted by aphistis
...I'm awfully curious where you live that a "mediocre" house costs $275,000, and a "decent" one $400,000. My fiancée and I will be able to pick from some absolutely palatial residences & properties for little more than that.

i started laughing (not at you) when i read this - then i saw where you are located ... lol

just visit any major cities on either coasts and check out real estate prices.. and have some nitro ready for a heartattack!!

Originally posted by Stinky Tofu
Did your brother get the M3 when it first came out? There was a huge markup for the first 1-2 years after it came out. The markup was even worse in California. MSRP just went up to $47,795 for the M3 coupe and $56,295 for the convertible.

stinky, u must be a huge bmw fan.. you know the M3 prices down to the dollar! you would own priceisright if they had a M3.. lol

btw if i had the $ i'd get the current M3 before bangle screws up the next M3!!

Originally posted by chef
stinky, u must be a huge bmw fan.. you know the M3 prices down to the dollar! you would own priceisright if they had a M3.. lol

btw if i had the $ i'd get the current M3 before bangle screws up the next M3!!

I am a huge fan of the M3 and that's why I bought one as an intern. The only reason I know the current prices is because I had a copy of one of the BMW magazines (Roundel) next to me and it had an article regarding the price increases. By the way, anyway considering a BMW in the future should join BMW Car Club of America (http://www.bmwcca.org/) because you get $500-$1500 off the cost of the car if you've been a member for over one year.

thats awesome stinky... did u get the 6sp or SMG? u need snow tires for boston winters right? lol

check out bimmer.org - i lurk there too.

I bought the 6-speed because the SMG II wasn't available when I bought my M3. I do need snow tires and I bought some 17-inch BMW replicas and put Blizzaks on them for the winter. Bimmer.org has been a great resource for me -- especially the M3 forum.

Awesome thread gang,

I had a question. I am also looking at getting a physician loan through Sun Trust, BofA, or Compass...In getting ready to apply I checked my credit score and its 653. Now here is my question:

1. Is this credit score the same as FICO that everyone refers to on this thread (sorry if this is a stupid question)

2. Are my student loans factoring into the score right now? And if yes, will it be higher when the bank starts evaluating my app?

Thanks a million for all the info on the thread and good luck everyone on the match!

I had a question. I am also looking at getting a physician loan through Sun Trust, BofA, or Compass...In getting ready to apply I checked my credit score and its 653. Now here is my question:

1. Is this credit score the same as FICO that everyone refers to on this thread (sorry if this is a stupid question) Yes it is the same. However, what you pull as a consumer can be different than the score the bank gets. I recently found this out as we are buying a new house. Boy was I pissed. :meanie: Even considering that you shouldn't be a sub-prime borrower. You should get a good interest rate.

2. Are my student loans factoring into the score right now? And if yes, will it be higher when the bank starts evaluating my app? Not too sure about that one. I think if it is in repayment and you have a good payment history it should raise your score. If your loan is in repayment it will count against your debt to income ratio. If it is not in repayment in the near future is shouldn't count in the debt/income ratio.

For everyone considering buying their first house a word of warning. Lenders will max you out if you let them. We are in the processes of selling our current house and buying a new one. I figured out the payments I thought we could afford and came up with the amount of house we could buy. I figured we could afford a $150,000 home, which in phoenix will buy a decent house. The bank wanted to approve us for $250,000! We would have money for nothing else. Luckily, I was an accountant before being a mom and am good with a finances. I know people who weren't so lucky and bought the max the bank approved them for. Seems like they are always broke and living paycheck to paycheck. Figure out the house you can afford and stick too it. Just my $.02

Thanks for the info and the tips!

We'll see what happens. I'm going to apply solely on my 37K income since the wifey is just getting out of law school and is going to wait to pass the bar. If I find oiut any new info, I'll post it here.

Ahh, your credit score is actually calculated by you bank. The number you get with the credit report is only their estimate. The actual information on the reports should be the same.

Ed

i am buying a condo very soon but i am pretty much clueless how the process works. is there a website that explains everything in plain english? pmi, home insurance, closing costs, arm, 30 yr, 15 yr, arrrrrrrrrrrrgh


question about loans:

is it true that if you open a 30 yr mortgage, your interest for 30 years is calculated and added to the prinicipal UP FRONT??? so even if you pay off your entire loan in 5 yrs, you will still pay for interest for the other 25 yrs.

i cant stand paying the bank more than 100K for a 300k home. i can put down 30% up front, and i think i'll have enough cash to pay off the house in 5 years.

w/ 5 yr ARM 5%, i'll pay $50k in interest, or $840/month. is that right?

Originally posted by chef
i am buying a condo very soon but i am pretty much clueless how the process works. is there a website that explains everything in plain english? pmi, home insurance, closing costs, arm, 30 yr, 15 yr, arrrrrrrrrrrrgh


question about loans:

is it true that if you open a 30 yr mortgage, your interest for 30 years is calculated and added to the prinicipal UP FRONT??? so even if you pay off your entire loan in 5 yrs, you will still pay for interest for the other 25 yrs.

i cant stand paying the bank more than 100K for a 300k home. i can put down 30% up front, and i think i'll have enough cash to pay off the house in 5 years.

w/ 5 yr ARM 5%, i'll pay $50k in interest, or $840/month. is that right?

The interest is not tacked onto the loan upfront. It is amortized over the life of the loan. The reason the interest payment is higher at the beginning is that your interest is determined by your principal balance. Every month your payment is divided between the two. So your principal is slowly reducing and the amount of interest you pay gets lower, while the amount that goes towards principal gets higher. I hope that makes sense. It is getting late and I am not thinking too well.

PMI is insurance that you are required to pay if you put less than 20 % down. Arm stands for adjustable rate mortgage. You rate will change according to the current rates, ours was limited to 1% in either direction, at certain intervals (ours was every year). We locked in the rates since they were so low and are expected to rise. 15 and 30 year is simply the amount of time you will be paying the loan if you make the minimum monthly payment. You can knock 10 years off of a 30 year mortgage if you make just one extra payment a year!

ok, so i bought a home (will close in 2 months) and need a mortgage.

do credit unions always have the best rates? what about some online places?

also what are some traps and pitfalls I need to avoid in unnecessary hidden charges? what is included in "closing costs"?

looking for 5 yr ARM interest only loan


any help appreciated. i'm a first time buyer and all the fees are giving me headaches. i'm googling for mortage help websites

I would recommend you future home buyers checking you credit scores yourself prior to buying. I found a small error that was hurting my score and am trying to correct it.

you can check your own without penalty, but allow the bank to "do it for you" will be seen as an outside inquiry and lower your score if done repeatedly, this is the same reason that having lots of individual store credit cards will lower the score.

Anyway, I went to www.myfico.com and bought the $38.95 report that shows all 3 credit agencies. Since they don't share information, you should look at them separately and look for inequities, late payment citations, etc. One of the companies had me for a late payment (in '97!) and the others didn't, this is what I am trying to correct.

When you select the page to buy the report, you can put in promotional code " myfico20 " for a 20% discount on the price of the report.

Otherwise, the BOA 5/1 product is also what I plan to go with, and my banker told me that they were able to extend the deal to most all the states.

jason

An interesting article on Alan Greenspan's praise of ARMs by Slate (hits some of the pros and cons):

ARMed and Dangerous (http://slate.msn.com/id/2096313/)

What is BOA 5/1?

Originally posted by jason952
I would recommend you future home buyers checking you credit scores yourself prior to buying. I found a small error that was hurting my score and am trying to correct it.

you can check your own without penalty, but allow the bank to "do it for you" will be seen as an outside inquiry and lower your score if done repeatedly, this is the same reason that having lots of individual store credit cards will lower the score.

Anyway, I went to www.myfico.com and bought the $38.95 report that shows all 3 credit agencies. Since they don't share information, you should look at them separately and look for inequities, late payment citations, etc. One of the companies had me for a late payment (in '97!) and the others didn't, this is what I am trying to correct.

When you select the page to buy the report, you can put in promotional code " myfico20 " for a 20% discount on the price of the report.

Otherwise, the BOA 5/1 product is also what I plan to go with, and my banker told me that they were able to extend the deal to most all the states.

jason

thx for the fico tip. i checked mine for the first time ever and they were 758, 788, and 771. do u think that's good enough to get approved on a 200k loan? (300k home, 100k downpayment)

My top choice for residency is in San Antonio and I have been looking for mortgages. Far and away the best deal I have found is with Bank of America. They offered me a 7/1 ARM at 5.125% with 100% financing and no PMI. The only caveat is that I was told the FICO score has to be above 720, which thankfully both me and my fiance have, and that we will have to pay the closing costs (about $4,000). Our expected combined income will be about $62,000 with one $250/month car payment (no credit cards, student loans in deferrment) and the loan officer said we could borrow up to $185,000. Below is the name of the loan officer I spoke to (who is based in San Antonio) if any of you want to contact her:

Sonnette Lewis Account Executive
Bank of America
800-811-9087 x 5007
210-525-5007
210-525-5085 fax
sonnette.lewis@bankofamerica.com

Hope this is helpful.

Originally posted by gaspasser2004
My top choice for residency is in San Antonio and I have been looking for mortgages. Far and away the best deal I have found is with Bank of America. They offered me a 7/1 ARM at 5.125% with 100% financing and no PMI. The

That rate is really high. I would think you can do better. The FHA rate is 3.97% with and APR of 2.28% (WOW) according to mortgage101.com. You may do better with an 3% down FHA mortgage paying the PMI -- you should run the numbers both ways.

Ed

this is what i'm offered

$200k loan, 5 yr ARM, 4.25%, 0 pts, no prepay penalty